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ACFIC Speech Calls for Rule of Law

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In his speech to the fourth plenary meeting of the 2nd Session of the 12th CPPCC National Committee in Beijing on March, ACFIC Vice Chairman Zhuang Congsheng called for scientific legislation, strict law enforcement, fair jurisdiction, and law abiding by all citizens to protect the interests of private entrepreneurs.

Zhuang said that the major decisions of the 3rd Plenum of the 18th CPC Central Committee on comprehensively deepening reforms and advancing the Chinese construction of rule of law responded to and reflected the common appeals of the personages of the non-public economy for reform, fairness, security and development.

“Many entrepreneurs have told us that what they want is not more special care, but fairness, not privileges but security,” Zhuang said. “The rule of law and development in a predictable sound environment is what they look for.”

Fragile objects

In recent years, the “anti-triads campaign” in some places has been turned around by the triads to target the personal and property safety of some entrepreneurs.

The Vice Chairman pointed out that without strong legal safeguards, private enterprises are simply “fragile objects”. The absolute majority of the country’s 12 million private enterprises and 44 million individual business households are small, scattered and weak at risk control.

“They are hard to grow but easy to destroy,” he said.

The forces that can destruct the enterprises overnight include the unrestrained authority of ratification, supervision and administration held by some officials.

Facing selective law enforcement and abuse of free-will judgment, enterprises can do nothing but complain that “the upper-levels are fine but the lower-levels are so harsh”.

To survive, some entrepreneurs compromised to their surroundings and busy themselves with giving gifts and forging ties, corrupting officials on the one hand and incurring insecurity for their enterprises on the other.

Invisible barriers

Zhuang said that the government has rolled out a basket of new policies in recent years but the complaints of private enterprises are also plenty due to various “glass doors, swing doors and evolving doors” caused by the inadequacies in those policies.

For example, the policy on the institutional change of small-loan companies into rural banks and the policy on the oversea IPOs of blue-stocks have been in effect for four years and seven years respectively, but without a single enterprise being able to qualify.

For example, to quality for tax breaks, some enterprises have to obtain up to 40 ratifications, but sometimes, still without success.

For example, to get overseas public offerings for their enterprises, some entrepreneurs had to give up their nationalities and self-jokingly became the “Caribbean pirates”.

For example, some local governments refused to acknowledge the agreements and projects signed by their predecessors. Some departments harbor deep prejudices against private ownership and tend to treat private enterprises unfairly.

Zhuang stressed that without strong legal safeguards, private enterprises are simply unable to surpass those invisible barriers. 

Security Issues

Zhuang stressed that without strong legal safeguard, the feeling that “small wealth is safe but big wealth causes trouble” will continue to prevail.

Many entrepreneurs told ACFIC that they feel “it is not honorable to be a businessman and they are not proud of getting rich”, in interviews conducted by ACFIC with over 600 entrepreneurs early last year.

They said that their anxiety about their personal and property safety increased with the wealth they accumulated.

Zhuang said that an excellent entrepreneur can motivate the development of a whole sector and create several hundred thousand jobs. He warned that social hostility towards those who got rich first can lead to severe loss of social resources.

“Our proposal is to build and safeguard the authority of law as a priority; stick to scientific legislation, strict law enforcement, fair jurisdiction, and law abiding by all citizens; and protect entrepreneurs’ economic property from violation, their private business from disturbance, and their personal safety and business honor from harm.” 

“At the same time, strengthen education and guidance of the entrepreneurs; help them increase awareness of rule of law, be honest and honorable, do business in accordance with law, compete in a fair manner, pay tax as required, fulfill their social duty, and establish a fine social credit and personal image,” the Vice Chairman concluded. 



Date:2014-3-11 9:50:31